Federal Relations Update

With one week to go, Congress is once again facing a fiscal cliff. On January 2, 2013, the American Taxpayer Relief Act became law. In addition to extending tax cuts for a majority of Americans, that law delayed the implementation of billions of dollars in automatic spending cuts, also known as sequestration, to March 1, with the hope that lawmakers would find an alternative to the cuts, which all agree, would be harmful to the economy. So far, there is no deal in sight. NLC continues to urge Congress to avert the cuts. See statement NLC issued earlier this week about the impending deadline.

Last week bipartisan legislation was introduced in both chambers of Congress to allow state and local governments to collect an estimated $23 billion in online sales taxes, thus ending the online sales tax 'break.' Seeing the legislation become law is a top legislative priority for NLC, which called on Congress to move quickly on the legislation, after similar bills languished in past sessions of Congress.

While the internet creates exciting new marketplaces, it has also put traditional retail outlets at an unfair disadvantage because of outdated and inequitable tax and regulatory environments. In 1992, a Supreme Court ruling left local governments unable to enforce their existing sales tax laws on sales by out-of-state catalog and online sellers. The Court, however, explicitly stated that Congress had the constitutional authority to enact legislation overruling its decision.

To see a list of the legislation's current co-sponsors, please click here. If a member of your congressional delegation is an original co-sponsor of the legislation, please contact and thank them. If not, please contact your member and ask them to sign on as a co-sponsor. For more information on the legislation, go to resource page.

In last week’s State of the Union address, the President announced a job-creating infrastructure investment plan that calls for $50 billion in new transportation investments, with a majority targeted towards the most urgent upgrades; the creation of a national infrastructure bank and America Fast Forward bond program, modeled after the Build America Bond program, the implementation of the newly expanded TIFIA program, and efforts to streamline the regulatory review process. To view the White House’s Fact Sheet on the plan, click here.

While NLC applauded the President’s announcement, it also warned that efforts to eliminate or limit the exemption for interest earned on municipal bonds would undermine the President’s proposals by increasing the costs of borrowing for local governments and preventing certain infrastructure projects from going forward.

Last week, in a hearing before the House Energy and Commerce Committee, Subcommittee on Environment and Economy, Michael Sesma, Council Member from Gaithersburg, Maryland testified before Congress that the nation's water infrastructure is aging and that cities face a backlog of projects and funding challenges that were only made worse by the recent economic downturn. As cities and towns across the country continue to have concerns about the affordability of meeting Clean Water Act (CWA) requirements, as well as the increasing number of unfunded federal mandates imposed on local governments, NLC called on Congress to support existing and new financing mechanisms for funding water infrastructure projects-including preserving the tax-exempt status of municipal bonds, which help fund three-quarters of the infrastructure projects in the U.S. built by state and local governments, and to prioritize funding for the Clean Water and Drinking Water State Revolving Loan Fund programs.

Transportation for America will hold a webinar on the impact of the 2012 transportation bill, MAP-21, on rural communities. Panelists include Commissioner Kathy Rinaldi, Teton County, Idaho; Charles W. Fluharty, President and CEO, Rural Policy Research Institute; Chris Zeilinger, Director of Policy Development, Community Transportation Association of America; Georgia Gann, Deputy Director of Government Affairs, Transportation for America; and John Robert Smith, President and CEO, Reconnecting America and Former Mayor of Meridian, MS (moderator) Register at: https://cc.readytalk.com/cc/s/registrations/new?cid=6juzywy9fcvo